Lumber Liquidators releases new policies in wake of 16×9 investigation

On Friday, October 3rd after 16×9 released its investigation online into illegally sourced timber by Lumber Liquidators the company announced important new policies on sourcing and oversight of wood procurement. In a statement released that day, the company said it will “purchase from sustainably grown and harvested forests with independent certification and we will source from these forests whenever available.”

The company, which is the biggest flooring retailer in North America also said it “will utilize third-party auditors to verify the sustainability” of the wood they purchase which will use their “guidelines for sustainable harvest management.”

The company added that it is willing to “suspend suppliers and sever business relationships with those that fail to adhere to Lumber Liquidators’ policies and requirements” and it will move its sourcing from higher risk countries to lower risk ones.

In October 2013, Lumber Liquidators was accused of sourcing wood illegally from mafia operators in the Russian Far East by the Environmental Investigation Agency, an international environmental group. Lumber Liquidators denied importing illegal lumber and said the EIA report “contained fundamental inaccuracies and unsubstantiated claims.”

Last spring, Greenpeace USA accused the company of buying wood from dubious producers who operated in the Brazilian rainforest. At the time Lumber Liquidators said that their “business partners, suppliers and distributors meet [their] standards and operate in an ethical, legal and sustainable manner.”

Lumber Liquidators has in the past told 16×9 that they have strong oversight, tracking and training initiatives. They also said they were working with outside firms to do more third party reviews of their supply chain. Their latest release however, contains major new details and important policy announcements for the company.

“Their statement has good objectives in it,” says EIA head, Sascha Von Bismarck, “but to the extent they were doing these things before or during our [three year] investigation, it didn’t work.”

“Discontinuing Xingjia as a supplier would be a minimal first step,” Von Bismarck says. A responsible procurement policy must include an announcement that “they are no longer buying from the worst actor” in the Russian Far East.

He also says that, in the future Lumber Liquidators’ policy will only be effective “if they actually refuse shipments, not just have the ability to do so.”

EIA carefully tracked Lumber Liquidators’ shipments from China to the U.S. using publicly available export- import data as a key part of its analysis. Since the EIA report came out, EIA says that Lumber Liquidators has removed its names from much of that data; a move legally allowed under U.S. law.

Von Bismarck says the ability to verify whether Lumber Liquidators is changing its import patterns has become more difficult to do since the EIA report came out and the company made this move. “The seriousness of this policy depends on showing what you are doing,” Bismarck says and redacting its name from this data “is a very concerning sign.”

Greenpeace USA, which held protests outside Lumber Liquidators headquarters last May, called the company’s new sustainability policy a “step forward” but wants to see more details. It also wants to see more specifics “so that effectiveness can be measured.”

Greenpeace Forest Campaigner Daniel Brindis told 16×9 that the company needs to have true “independent auditors. It should affirm that truly independent audits do take place.”

Lumber Liquidators also says that it will institute Global Reporting Initiative Framework which will allow observers to measure “sustainability practices and outcomes,” but it will only put this out at the end of 2017.

“This information should come out sooner” Brindis adds, “three years is a long time to wait and Lumber Liquidators is capable of providing this information sooner than that.”

Brindis also says that he wants the company to go beyond simply following American laws and regulations and institute a strong policy on sustainable logging.

The US Justice Department and the Department of Homeland Security raided Lumber Liquidators head offices last Fall under suspicion that the company was importing illegal wood.

One expert, that 16×9 spoke with on condition of anonymity, was “impressed” by the company’s new efforts at sustainability but added that if the company broke the law in the past and “the Justice Department doesn’t come down on them pretty hard there will not be much deterrence for other bad actors.”

He added that executives at other companies who are making daily decisions about what are acceptable risks in their wood sourcing must know that their actions will have consequences. “It’s like catching tax evaders. The real deterrence is the possibility of jail time.”